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Marshalls defies Beast from the East to deliver 2018 earnings growth

Sales are up 16% in the first two months of 2019, boosted by the acquisition of concrete brick maker Edenhall
Marshalls
Marshalls raised its total dividend for the year by 13%

Paving slabs supplier Marshalls PLC (LON:MSLH) said it has had a strong start to trading this year after 2018 profits and revenues gained despite severe weather conditions.

In the year to 31 December 2018, profit before tax increased 21% to £62.9mln and revenue rose 14% to £491mln, led by sales to the public sector and commercial markets.

READ: Marshalls buys Edenhall, ups annual earnings guidance

The results included a full year contribution from CPM Group, the precast concrete manufacturer Marshalls bought in October 2017.

READ: Marshalls snaps up pre-cast concrete maker CPM for £38mln

The so-called Beast from the East, which brought heavy snowfall from Siberia to the UK in early 2018, hurt first-half results but this was offset by a stronger second half.

Dividend

The board recommended a final dividend of 8.0p per share along with a supplementary dividend of 4.0p. The total payout for the year, including an interim dividend of 4.0p, is 16.0p, up 13% on the previous year.

"The group delivered a strong result in 2018 and continues to outperform the Construction Products Association's (CPA) growth figures, despite ongoing macro-economic and Brexit uncertainty,” said chief executive Martyn Coffey.

“The CPA's recent Winter Forecast predicted a decrease in UK market volumes of 0.2 per cent in 2018, followed by an increase of 0.3 per cent in 2019.

“However, our recent trading has been strong and the underlying indicators in the new build housing, road, rail and water management markets remain supportive to our growth strategy and plans.”

In December the company announced it had acquired concrete brick maker Edenhall Holdings for up to £17.2mln.

Due to a cash outflow of £16.4mln related to the purchase of Edenhall, net debt rose to £37.4mln last year from £24.3mln in 2017.

However, the acquisition has boosted trading with sales up 16% in the first two months of the 2019 financial year. Excluding Edenhall, underlying sales are 8% higher.

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